Quickly evaluate whether a project or investment is expected to create value using our simple NPV calculator. No signup required.
Enter the upfront investment amount of the project today. This is typically a negative number, representing money going out at the start of the project.
The return required for this project, often based on WACC, used to convert future cash flows into today's terms based on risk and timing. Don't know your discount rate? Use our free WACC calculator.
Enter the cash flow you expect the project to generate in each future year (positive or negative). These should be projected, not historical, amounts.
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Net present value is a way to answer a simple question: “Does this project justify the investment, given the return I require?”
To calculate NPV, you look at two things:
Those future cash flows are adjusted using a discount rate so the numbers reflect time value of money (cash later counts less than cash today) and the level of risk in the project (riskier projects need a higher return).
The net present value formula looks like this:
NPV = CF₀ + Σ [ CFt ÷ (1 + r)ᵗ ]
In this formula:
Assume you invest $75,000 in a project that generates $30,000 per year for three years. Using a 12% discount rate, you first discount each year’s cash flow back to today, then add those discounted amounts together.
If the total of the discounted cash flows exceeds $75,000, the net present value of the project is positive. If it falls short, the NPV is negative.
A positive NPV means the project is expected to create value above the required return. A negative NPV means it does not.
Our NPV calculator helps you apply this logic quickly, showing whether a project’s net present value is positive or negative based on your inputs.
In practice, however, the quality of an NPV calculation depends heavily on the assumptions behind it, especially cash flow projections and the discount rate.
In professional financial modeling, those inputs are informed by experience, industry data, and judgment, and are often pressure-tested across different scenarios. That’s why we strongly recommend viewing this calculator as a starting point rather than a final answer.
For situations where accuracy and defensibility matter, reach out to our team at Eton Venture Services for expert financial modeling support.
Capital budgeting and project selection
Companies use NPV to decide which projects to pursue, comparing expected returns to the cost of capital to identify investments that are expected to create value.
In M&A, NPV helps assess whether an acquisition is justified by comparing the expected cash flows of the target to the purchase price and required return.
Beyond individual projects, NPV supports broader planning decisions by showing how different initiatives compare when timing, risk, and required returns are taken into account.
At Eton Venture Services, we support capital and investment decisions through disciplined net present value analysis. We’re a boutique firm with Big Four expertise, so you get rigorous financial modeling with hands-on support, faster turnaround, and practical guidance when accuracy matters. And our clients rely on it:
Eton works with many Attivo Partners clients and we are confident introducing Eton to our clients for their valuation needs. Eton is easy to work with, process oriented and reasonably priced. Eton listens to what our client needs, understands their business model, and provides a level and ease of communication that is rare among valuation firms. Eton’s old-school approach to customer service is refreshing!
The team at Eton is fantastic! Those guys cut their teeth as securities lawyers at premier firms in Silicon Valley so no matter how complex a situation we have presented to them, they are quick on the uptake, and they quickly produce great work. Plus, I can talk to the founder of the firm by simply picking up the phone. Eton truly exceeds our expectations!
As a firm, Kruze Consulting is extremely confident in introducing Eton to our clients for valuation work. Eton is super responsive, reasonably priced, and they take customer service to impressive levels. Eton is a great partner for us and the companies we work with!
Working with Eton has been a fantastic experience, and they have been a great partner of ours. The team provides us with well-priced services, delivers quickly and is very responsive to our requests and questions, whether those communications are from our board of directors, our outside counsel, or from our financial statement auditors.
Net present value is a financial metric that measures how much value a project or investment creates by comparing the cash invested today to the cash expected in the future, adjusted for risk and timing.
It works by discounting future cash flows back to today using a discount rate, then subtracting the initial investment.
If NPV is positive, the project is expected to create value above the required return. If it’s negative, the project is expected to fall short.
Yes. A project can produce positive cash flow and still have a negative net present value if those cash flows are too small, too delayed, or too risky relative to the required return.
NPV looks at when cash is received and whether it compensates for risk, not just whether cash comes in at all.
NPV and IRR answer different questions. NPV shows how much value a project creates in dollar terms, while IRR shows the percentage return the project is expected to generate.
For example, two projects can both have an IRR of 15%, but if one requires a much larger investment, it may create far more value in absolute terms. NPV captures that difference; IRR does not.
Because of this, NPV is often considered more reliable for project evaluation, particularly when comparing investments of different sizes or timing. IRR is frequently used as a complementary metric.
An online NPV calculator is useful for initial analysis and scenario testing, helping you understand how changes in assumptions affect value.
For transactions, capital allocation decisions, or financial reporting, NPV is typically built within a broader financial model using detailed forecasts, market data, and professional judgment to ensure accuracy and defensibility.
If your decision needs to stand up to scrutiny, the team at Eton Venture Services can provide a reliable net present value calculation tailored to your situation.
